C12 - Home and Branch.doc

Chapter 12 Problem I (a) (a)Worki orking ng Fund – Agenc gency y ………… …………… …………… ……………… ……… … ……… ……………… ……………… ……….. 5,0 5,000 Cash …………………………………………………………………………. 5,000 (b)Ac (b)Accou counts nts Receiva eceivabe be ……………… ……………………… ……………… ………….. …..... ..... ..... ...... ..... ..... ...... ...... ...... ...... ...... ...... ..... 50,000 50,000 !aes"Agency …… ………………………………………………………………. 50,000

(c)Ca (c)Cash sh ……………… ……………………… ……………… ……………… ……………… ……………… ………... ...... ...... ...... ...... ..... ..... ...... ...... ...... ...... ...... ..... .. Accounts Receivabe ……………………………………………………..

#5,000 #5,000 #5,000

(d)$%&en (d)$%&enses" ses"Agen Agency cy ………………………… …………………………………… ……………………… ………………………… …………….. .. Cash ………………………………………………………………………….

',500 ',500

(e)$%&en (e)$%&enses" ses"Agen Agency cy ………………………… ……………………………………… ……………………… ……………………… …………….. .. Cash ………………………………………………………………………….

,50 ,50

',500 ,50

()Cost ()Cost o o *oods *oods !od"Ag !od"Agency ency ………………………… …………………………………… ……………………… ……………… … #+,000 #+,000 erchandise !hi&-ents"Agency ………………………………………. #+,000 Problem II (a) ranch ranch ooks ooks//

(a) (a) Ca Cash sh ………… ……………… ………… ………… ………… ………… ………… ………… ………… ………… …….. .. o-e 12ce ……………………………………………

',5 ',500 00

(b) (b) !hi& !hi&-e -ent nts s roro- o-e o-e 12c 12ce e ………… ……………… ………… ………… ……… … o-e 12ce …………………………………………...

50, 50,00 00

(c) (c) Accou ccount nts s Rec Recei eiva vab be e ……… …………… ………… ………… ………… ………… ………. …. !aes ……………………………………………………..

+0,0 +0,000 00

(d) (d) 3urch urchas ases es ………… ……………… ………… ………… ………… ………… ………… ………… ………… …… Accounts 3ayabe ……………………………………

,5 ,500 00

(e) (e) o-e o-e 12ce 12ce ………… ……………… ………… ………… ………… ………… ………… ………… ……... Accounts Receivabe …………………………..

5#,' 5#,'00 00

() () Accou ccount nts s 3ayab ayabe e ………… ……………… ………… ………… ………… ………… ………. …... .. Cash ……………………………………………………..

4, 4,50 50

',500 50,00 +0,000 ,500 5#,'00 4,50

(g) Furnit urnitur ure e  Fi%tur i%tures es ……………… ……………………… ……………… ……………… ………… … Cash ……………………………………………………..

6,000 6,000

(h) (h) $%&e $%&ens nses es ………… ……………… ………… ………… ………… ………… ………… ………… ………… …….. .. Cash ……………………………………………………..

46,0 46,000 00

6,000 46,000

(b) o-e o-e 12ce 12ce ooks/ ooks/ (a) (a) ran ranch ch ………… ……………… ………… ………… ………… ………… ………… ………… ………… ………. …. Cash …………………………………………………….

',5 ',500 00

(b) (b) ra ranch ……… ……………… ……………… ………………… ……………… ……… ………… ……………

50, 50,00 00

',500

!hi&-ents to ranch ………………………………..

50,00

(c) (c) Accou ccount nts s Recei eceiva vab be e ………… ……………… ………… ………… ………… ………. …... .. !aes ……………………………………………………

405, 405,00 000 0

(d) (d) 3urc urchases ses ………… …………… ………… ……………… ………………… ……………… ……… ……. Accounts 3ayabe ………………………………….

4, 4,50 500 0

(e) Cash ……… ……………………………………………………….. Accounts Receivabe ………………………………

44# 44#,+00

() Accounts 3a 3ayabe ……… ………………………………………. Cash ……………………………………………………

4' 4',000

(g) (g) $%&e $%&ens nses es ………… ……………… ………… ………… ………… ………… ………… ………… ………… …… Cash ……………………………………………………

+,+ +,+00 00

(h) Cash …… ……………………………………………………….. ranch ………………………………………………...

5#, 5#,'00

(i) (i) Reta etained ined $ar $arnings ings ………… ……………… ……………… ………………… ……………. …. Cash …………………………………………………...

40, 40,000 000

405,000 4,500 44#,+00 4',000 +,+00 5#,'00 40,000

AR718 C1. aance !heet or ranch 9ece-ber #4, 0%' Assets

:iabiities

Cash …………………………… 40,50 Accounts Receivabe ……… #00 erchandise ;nv……………... #<,=00 3re&aid $%&enses …………… Furnitures  Fi%tures …. 3 6,000 :ess accu-. 9e&r …… +50  7ota  7ota Assets …………………… …………………… ………………….3'6,'50

3 ',50

Accounts 3ayabe ………… 3

4,+00

Accrued $%&enses ……………

#,500

o-e 12ce …………………..

<50 <,#50 3'6,'50

7ota :iabiities :iabiities

AR718 C1. ;nco-e !tate-ent or ranch For >ear $nded 9ece-ber #4, 4=?+ !aes ………………………………………………… …………………………………………………………………………… ………………………… 3++,000 Cost o *oods !od/ 3urchases …………………………………………………………… !hi&-ents or ho-e o2ce ………………………………………. erchandise av avaiabe o or sa sae …… ………………………………… :ess -erchandise inv, 9ece-ber #4 ………………………….. Cost o *oods !od ………………………………………………..

3,500 50,00 3<,<00 #,500 '=,00

*ross 3ro@t ……………………………………………………………………. $%&enses ……………………………………………………………………… 8et oss ………………………………………………………………………...

34+,600 46,00 3 4,'00

AR718 C1. ;nco-e !tate-ent or ranch For >ear $nded 9ece-ber #4, 0%' Assets

:iabiities  !tockhoders $uity

Cash …………………………….. 3 #,00 :iabiities Accounts Receivabe ……….. 4=,050 Accounts &ayabe ………… 3 4,#00 erchandise ;nventory……… '6,500 Accrued $%&enses …………. 4,#50 3,+50 3re&aid $%&enses ……………. ,050 !tockhoders $uity Furniture  Fi%tures …. 3 0,000 Ca&ita stock, 30 &ar……… 350,000 :ess accu-. 9e&r….. 5,560 4','0 Retained $arnings …………. <,<'0 4,'<0 ranch ………………………… #<,=00 7ota iabiities and stockhodersB  7ota Assets …………………... 34'5,40 euity ………………… 34'5,40 AR718 C1. ;nco-e !tate-ent or o-e 12ce For >ear $nded 9ece-ber #4, 0%' !aes ……………………………………………………………………………....... Cost o goods sod/ erchandise inventory, anuary 4 …………………………………. 3urchases ………………………………………………………………... erchandise avaiabe or sae ……………………………………… :ess shi&-ents to branch ……………………………………………... erchandise avaiabe or oDn sae ……………………………….. :ess -erchandise inventory, 9ece-ber #4 ………………………. Cost o *oods !od ……………………………………………………. *ross 3ro@t ………………………………………………………………………… $%&enses …………………………………………………………………………… 8et inco-e ro- oDn o&erations …………………………………………….. 9educt branch net oss ………………………………………………………….  7ota ;nco-e ……………………………………………………………………….

3405,000 3 '0,40 4,500 34+,+0 50,00 344,'0 '6,500 +#,=0 3 '4,060 <,+#0 3 4#,'50 4,'00 3 4,050

AR718 C1. ;nco-e !tate-ent or o-e 12ce For >ear $nded 9ece-ber #4, 0%' !aes …………………………………………………………………………………. Cost o goods sod/ erchandise inventory, anuary 4 ………………………………….. 3 '0,40 3urchases ………………………………………………………………… 4'5,000 erchandise avaiabe or sae ……………………………………… 3465,40 :ess -erchandise inventory, 9ece-ber #4 ……………………….. <,000 Cost o goods sod ………………………………………………………. *ross &ro@t ………………………………………………………………………….. $%&enses …………………………………………………………………………….. 8et ;nco-e ………………………………………………………………………….

34<4,000

44#,40 3 5<,660 '5,6#0 3 4,050

(a) ranch ooks/ $%&enses ………………………………………………………………. Accu-uated 9e&reciation – FF……………………….

+50 +50

!aes …………………………………………………………………… erchandise ;nventory ……………………………………………. ;nco-e su--ary …………………………………………..

++,000 #,500

;nco-e !u--ary …………………………………………………… !hi&-ents ro- o-e 12ce …………………………… 50,00 3urchases …………………………………………………… ,500 $%&enses ……………………………………………………..

=0,=00

o-e 12ce ………………………………………………………… ;nco-e !u--ary …………………………………………

6=,500

46,00 4,'00 4,'00

(b) o-e 12ce ooks $%&enses ………………………………………………………………. Accu-uated 9e&reciation – FF………………………. !aes …………………………………………………………………… erchandise ;nventory ……………………………………………. !hi&-ents to ranch ……………………………………………….. ;nco-e su--ary ………………………………………….. ;nco-e !u--ary …………………………………………………… erchandise ;nventory …………………………………… 3urchases ……………………………………………………. $%&enses ……………………………………………………..

4,460 4,460 405,000 '6,500 50,00 0#,<00 4=0,50 '0,40 4,500 <,+#0

ranch ;nco-e ……………………………………………………… ranch ……………………………………………………….

4,'00 4,'00

;nco-e !u--ary ………………………………………………….. ranch ;nco-e ……………………………………………

4,'00

;nco-e !u--ary ………………………………………………….. Retained $arnings ………………………………………..

4,050

4,'00 4,050

Problem III (a) ranch ooks/

 an.

4

4

Cash …………………………………………. o-e 12ce ………………………

4,500

!hi&-ents ro- ho-e o2ce ……………. o-e 12ce ………………………

40,00

4,500

40,00

4 4 4"#4 4"#4 4"#4 4"#4 4"#4  an.

4"#4 4"#4 4"#4

o-e 12ce ……………………………….. Cash ………………………………..

,+00

Accts. Rec."o-e 12ce ………………. !aes ………………………………..

+,00

Cash ……………………………………….. Accounts Receivabe …………..

,+00

3urchases …………………………………. Accounts 3ayabe ………………

#,000

Accounts 3ayabe ………………………. Cash ……………………………….. $%&enses ………………………………….. Cash ……………………………….

4 4

,+00 +,00 ,+00 #,000 4,'50 4,'50 4,50 4,50

Cash ………………………………………… Accts. Rec."o-e 12ce ……...

4,+00

o-e 12ce ……………………………… Accts. Rec."o-e 12ce …….

450

!hi&-ents ro- o-e 12ce ………… o-e 12ce …………………….

4,50

o-e 12ce ……………………………… Cash ……………………………… (b) o-e 12ce ooks/ 4

=00

Accts. Rec. – o-e o2ce ………………. o-e 12ce ………………………

4"#4

 an.

=00

4,+00 450 4,50 4,000 4,000

ranch …………………………………….. 4,500 Cash ……………………………… ranch …………………………………….. 40,00 !hi&-ents to ranch ………….. !tore Furniture and Fi%tures ranch ….. #,000 !tore Furniture and Fi%tures …...

4,500 40,00 #,000

4

Accu-uated 9e&r. !tore FF ……….. <50 Accu-uated 9e&r. !tore Furniture And Fi%tures, ranch ………….. <50 Cacuation o de&reciation/ .5years at 3#00, (40E o 3#,000), or 3<50

4

!tore Furniture and Fi%tures ranch ….. ranch ……………………………

4

=00

ranch …………………………………… ,+00 Accounts Receivabe ….........

=00 ,+00

4"#4 4"#4 4"#4 4"#4 4"#4

4"#4 4"#4 4"#4

Accounts Receivabe ………………… #',+00 !aes ………................................

#',+00

Cash ………………………………………. '0,000 Accounts Receivabe …………

'0,000

3urchases ………………………………….#4,+00 Accounts Receivabe ………….

#4,+00

Accounts 3ayabe ……………………… #+,00 Cash ……………………………...

#+,00

Accrued $%&enses 3ayabe …………. $%&enses …………………………………. Cash ……………………………..

50 6,=50 =,00

AoDance or 9oubtu Accounts ….. ranch …………………………..

450

ranch ……………………………………. !hi&-ents to ranch …………

4,50

Cash ……………………………………… ranch ………………………….

450 4,50 4,000 4,000

$A*:$ C1. aance !heet  anuary #4, 0%' Assets

:iabiities

Cash …………............................ Accounts Receivabe ………….. Accts. Rec."ho-e o2ce ………. erchandise ;nventory ………… erchandise in 7ransit ………….  7ota assets ………………… 3#<,00

3 4,400 #,+00 650 =,600 +00 3#<,00

Accounts 3ayabe ………………. 3 ,'00 Accrued e%&enses ………………. '00 o-e 12ce ……………………… 4',050 7ota :iabiities …………………….

$A*:$ C1. ;nco-e !tate-ent or ranch For onth $nded anuary #4, 0%' !aes …………………………………………………………………………………………. 3 +,00 Cost o *oods !od/ 3urchases …………………………………………………… 3 #,000 !hi&-ents ro- ho-e o2ce ……………………………. 44,'50 !hi&-ents ro- ho-e o2ce in transit ………….......... +00 erchandise Avaiabe or !ae ……………………….. 345,050 :ess -erchandise inv. 9ec #4, 4=?= ……................3=,600 erchandise in transit ………………………….. +00 40,'00 Cost o *oods !od ……………………………………………………………. ',+50 *ross 3ro@t ………………………………………………………………………………… 3 4,550 $%&enses …………………………………………………………………………………… ,440

8et :oss …………………………………………………………………………………..

..

3

5+0

$A*:$ C1. aance !heet or o-e 12ce  anuary #4, 0%' Assets Cash …………………………………………………………………… Accounts Receivabe ……………………………………………… 3#',000 :ess aoDance or doubtu accounts ……………….. 4,050 erchandise ;nventory ……………………………………………. !tore urniture and @%tures ………………………………………… 34,000 :ess accu-uated de&reciation ………………………. #,=50 !tore urniture and @%tures"branch ……………………………… 3 #,=00 :ess accu-uated de&reciation ……………………… <65 ranch o2ce ………………………………………………………...  7ota Assets ……………………………………………………………

3 =,400 #,=50 '',500 6,050 #,#45 4',050 3444,<+5

:iabiities Accounts 3ayabe …………………………………………….. 3=,450 Accrued $%&enses …………………………………………….. <50  7ota :iabiities ………………………………………………….. !tockhoders $uity Ca&ita !tock ……………………………………………………350,000 Retained earnings …………………………………………….. #4,6+5  7ota stockhoderBs euity ……………………………………  7ota iabiities and stockhoders euity ……………………

3=,=00

64,6+5 3444,<+5

$A*:$ C1. ;nco-e !tate-ent or o-e 12ce For onth $nded anuary #4, 0%' !aes ……………………………………………………………………………… 3 #',+00 Cost o goods sod/ erchandise inventory, anuary 4 …………………….. 3'+,000 3urchases …………………………………………………… #4,+00 erchandise avaiabe or sae ………………………… <<,+00 :ess shi&-ents to branch ………………………………… 4,050 erchandise avaiabe or oDn saes …………………. 3+5,550 :ess -erchandise inventory, anuary #4 ……………… '',500 Cost o goods sod …………………………………………………………… 4,050 *ross 3ro@t ………………………………………………………………………… 3 4#,+50 $%&enses …………………………………………………………………………… =,#5 8et inco-e ro- oDn o&erations ……………………………………………. 3 ',5 9educt branch net oss ………………………………………………………… 5+0  7ota ;nco-e …………………………………………………………………… 3 #,++5

Assets

$A*:$ C1. ;nco-e !tate-ent or o-e 12ce For onth $nded anuary #4, 0%' :iabiities and !tockhoders $uity

  :iabiities Cash …………………………….. ………. 3 40,00 Accounts 3ayabe …… 3#0,<00 Accounts receivabe ……….. 3#6,'50 Accrued $%&enses …… 4,400 3 #4,600 :ess aoD or doubt" Fu accounts ……….. 4,050 #<,'00 erchandise ;nventory ……………….. 5',=00 !tockhoders $uity !tore urn.  @%tures ………… 345,=00 Ca&ita !tocks …………350,000 :ess accu- de&r ',<#5 44,4+5 Retained earnings …… # 4,6+5 64,6+5  7ota assets ……………………………… 344#,++5 7ota iab. And stockhoders euity . 344#,++5 $A*:$ C1. Co-bined ;nco-e !tate-ent or o-e 12ce and ranch For onth $nded anuary #4, 0%' !aes ………………………………………………………………………………….. Cost o goods sod/ erchandise ;nventory, anuary 4 ………………. 3'+,000 3urchases ……………………………………………... #',+00 erchandise avaiabe or sae …………………... 360,+00 :ess -erchandise inventory, an #4 ……………... 5',=00 Cost o goods sod …………………………………............................... *ross &ro@t …………………………………………………………………………... $%&enses ……………………………………………………………………………… 8et ;nco-e …………………………………………………………………………..

3 '0,600

5,<00 3 45,400 44,'#5 3 #,++5

(a) ranch ooks  an.

#4

!hi&-ents ro- 12ce"in 7ransit ……………… o-e 12ce …………………………….

+00 +00

#4

$%&enses …………………………………………. '<5 o-e 12ce ……………………………. #4 $%&enses ………………………………………… #5 o-e 12ce ………………………….. 440 % 3#,000, or 35 (de&reciation or one -onthG Asset ie, 40 years)G 4=0 % 3=00, or 340 (de&reciation For one -onthG asset ie, <.5 years) #4

#4 #4 #4

erchandise ;nventory ……………………… =,600 erchandise in 7ransit ……………………….. +00 ;nco-e !u--ary …………………… $%&enses ……………………………………….. Accrued $%&enses ………………….

#50

!aes ……………………………………………. ;nco-e !u--ary …………………..

+,00

'<5 #5

40,'00 #50

;nco-e !u--ary ……………………………. 4<,4+0 !hi&-ents ro- o-e 12ce ……. !hi&. Fro- o-e 12ce – in 7rans . 3urchases ……………………………

+,00 44,'50 +00 #,000

$%&enses …………………………….. #4

o-e 12ce ………………………………….. ;nco-e !u--ary …………………...

,440 5+0 5+0

(b) o-e 12ce ooks/ #4 #4 #4

#4

#4 #4 #4 #4

#4 #4 #4

ranch …………………………………………. !hi&-ents to ranch ……………….

+00

ranch …………………………………………. $%&enses ……………………………...

'<5

ranch …………………………………………. Accu-uated 9e&reciation, !tore Furniture and Fi%tures ranch ……..

+00 '<5 #5 #5

$%&enses ………………………………………. 400 Accu-uated 9e&reciation store Furniture and Fi%tures branch ……. 440 % 34,000, or 3400 (de&reciation or one onthG asset ie, 40 years) ;nco-e !u--ary …………………………… erchandise ;nventory ……………

'+,000

erchandise ;nventory …………………….. ;nco-e !u--ary …………………..

'',500

$%&enses ………………………………………. Accrued $%&enses …………………. !aes …………………………………………… 3urchases …………………………… $%&enses ……………………………..

400

'+,000 '',500 <50 <50 '0,=5 #4,+00 =,#5

ranch ;nco-e ………………………………. ranch ………………………………..

5+0

;nco-e !u--ary ……………………………. ranch ;nco-e ……………………...

5+0

;nco-e !u--ary ……………………………. Retained $arnings …………………..

#,++5

5+0 5+0

Problem IV 4.

!ocrates Co-&any o-e 12ce and 3ato ranch Reconciiation o Reci&roca :edger Accounts  une #0, 0%' ;nvest-ent in

#,++5

Account

3ato ranch :edger Account (9ebit) 365,000

o-e 12ce :edger

aances &rior to adHust-ent Add/ erchandise shi&&ed to branch :ess/ Acuisition o o2ce eui&-ent by branch (carried in accounting records o ho-e o2ce) (4',500) Coection o branch trade accounts receivabe 3ay-ent o cash by branch (,000) AdHusted baances 3'6,500 .

(Credit) 3##,500 ',000 (=,000) IIIIIII   3'6,500

(a)

Accounting records of home oce: 12ce $ui&-ent/ 3ato ranch 4',500 ;nvest-ent in 3ato ranch  7o record acuisition o o2ce eui&-ent by branch.

Cash in 7ransit ;nvest-ent in 3ato ranch  7o record cash in transit ro- branch. (b)

,000 ,000

Accounting records of branch: o-e 12ce =,000  7rade Accounts Receivabe  7o record coection by ho-e o2ce o branch accounts receivabe.

;nventories in 7ransit o-e 12ce  7o record shi&-ent o -erchandise in transit roho-e o2ce. Problem V ((a)

aances beore AdHust-ents ……………………………………….. AdHust-ents/ Additions/ erchandise in transit to branch …………………. Coection o o-e o2ce receivabe by ranch Jnderstate-ent o branch net inco-e or 8ov.. 9eductions/ erchandise return to ho-e o2ce in transit ……………. Corrected aances ……………………………………………… (b) ranch ooks/ !hi&-ents ro- o-e 12ce"in 7ransit ……………………. o-e 12ce …………………………………………... o-e 12ce ooks/ ranch …………………………………………………………… Accounts Receivabe ………………………………..

4',500

=,000

',000 ',000

RA8C ACC1J87 3 6,'00

1$ 1FF;C$ ACC1J87… 3 =,<#5 +45

,500 =0 340,==0

340,#50

+'0 340,#50

340,#50

+45 +45 ,500 ,500

ranch …………………………………………………………… Retained $arnings ……………………………………. erchandise Returns ro- ranch – in 7ransit ……………. ranch …………………………………………………..

=0 =0 +'0 +'0

Problem VI 1.

Branch Account

aances beore adHust-ents AdHust-ents/   Additions/ Advertising charged to branch but not yet recorded on branch books erchandise in transit to branch but not yet shoDn on branch books Coection o ho-e o2ce account by branch not yet recorded by ho-e o2ce 9eductions/ 1verstate-ent o branch &ro@t or 0%0 on ho-e o2ce books Cash in transit to ho-e o2ce but not yet shoDn on ho-e o2ce books 1verstate-ent o charge or -erchandise roho-e o2ce on branch books (ho-e o2ce shi&&ed 00 units K 3#<.65, or 3<,5<0, and 00 units K 3'',=5, or 36,==0, a tota o 34+,5+0G branch erroneousy recorded shi&-ent at 34+,+50, an overstate-ent o 3=0 Corrected baances . o-e o2ce books/  an. #4 Retained $arnings Wishire ranch   #4

#4

Cash in 7ransit Wishire ranch Wishire ranch Accounts Receivabe

ranch ooks/  an. #4 Advertising $%&ense o-e 12ce #4

#4

!hi&-ents ro- o-e 12ce – ;n 7ransit o-e 12ce o-e 12ce

3 <<,450

ome oce Account 3 5+,'50

+00 ','00 IIII<50 3<<,=00

IIIIIII   3+4,'50

5'0 4+,000

IIIIIII 3 +4#+0

III=0 3 +4,#+0

5'0 5'0 4+,000 4+,000 <50 <50

+00 +00 ','00 ','00 =0

!hi&-ents ro- o-e 12ce

=0

Problem VII 1.

Branch Account

aances beore adHust-ents AdHust-ents/ Additions/ Corrected branch inco-e or anuary (34,''0 – 345) Jnderstate-ent o branch &aid by ho-e o2ce or 9ece-ber $%&enses o branch &aid by ho-e o2ce 9eductions/ Coection by ho-e o2ce o branch receivabe Correction o branch inco-e or anuary erchandise transerred to rentDood branch but incorrecty charged by every is branch erchandise returns to ho-e o2ce in transit Jncoectibe accounts o branch Corrected aances

3 5=,#+5

ome !ce Account 3 5<,55

4,5 #40 IIIIIII 3 +0,=00

IIII45 3 5<,<'0 +5 45

4,'00 6'0 II4,00 3 5<,'+0

IIIIIII   3 5<,'+0

. (a) $ntries to bring branch books u& to date/ Correction in ;nco-e o 3rior 3eriods o-e 12ce

45

o-e 12ce ;nco-e !u--ary

45

o-e 12ce Accounts Receivabe (b) $ntries to bring ho-e o2ce books u& to date/ every is ranch every is ranch ;nco-e every is ranch Retained $arnings

45

45 +5 +5

4,5 4,5 #40 #40

!hi&-ents to every is ranch every is ranch

4,'00

rentDood ranch !hi&-ents to rentDood ranch

4,'00

erchandise Returns ro- ranch – ;n 7ransit – every is ranch every is ranch

4,'00

4,'00

6'0 6'0

AoDance or 9oubtu Accounts – every is ranch every is ranch

4,00 4,00

Problem VIII 4.

(b) dse. aoDance by ho-e o2ce () 7ruck re&airs charged by ho-e o2ce

8et credit 7ota

(a) 3urchase o o2ce urniture or branch (c) ranch charge or interest (d) ranch charge or abor (e) ranch charge or reight

ome !ce (a) Charge or o2ce urniture #50.00 by ho-e o2ce <60.00 (d) Charge or abor by ho-e =#.00 o2ce 6++.00 (e) Charge or reight by ho-e o2ce <6.50 (h) 3roceeds ro- sae o  '<5.00 truck +'#.00 ,4==.5 0 4,55+.5  IIIIIII  0 4,=.5 ,4==.5 0 0 Branch (b) dse. aoDance or 6<0.00 branch #5.00 (g) 3roceeds ro- sae o truck '##.00 I<65.0 0 ,'4#.0 0  IIIIIII 8et 9ebit 7ota

,'4#.0 0 aance in branch account &er ho-e o2ce book, !e&te-ber #0, 0% 9educt net debit tota &er ho-e o2ce books or transactions that invove discre&ancies

Add net credit tota &er branch books or transaction that invove discre&ancies aance in ho-e o2ce account &er branch books, !e&te-ber #0, 0%

#00.00 '<5.00

 IIIIII  <<5.00 4,+#6,00 0  I,'4#.0 0 3 4#4,+=0.00 4,+#6.00 3 4#0,05.00 II4,55+.50 3 4#4,+06.50

. aance in ho-e o2ce account &er branch books, !e&te-ber #0, 0%

3

4#4,+06.50 Add/

(a) Faiure by branch to take u& u urniture charges (b) Recognition by branch o e%cess -erchandise aoDance (c) Faiure by branch to recogniLe charge by ho-e o2ce or interest (e) Faiure by branch to recogniLe u reight charges () 7ruck re&airs charge to ho-e o2ce account in error

3 =0.00

9educt/ (d) Recognition by branch o e%cess abor charges (h) Credit entry to ho-e o2ce -ade in error on sae o truck Corrected intero2ce baance, !e&te-ber #0, 0%

'##.00

50.00 #5 <0+.50 =#.00

II'<5.00

III4,'+'.50 3 4##,0<#.00

III=06.00 3 4#,+5.00

#. aance in branch account &er ho-e o2ce books, !e&te-ber #0, 0%

3 4#4,+=0.00

Add credit to branch account -ade in error or &roceeds ro- sae o truck Corrected intero2ce baance, !e&te-ber #0, 0%

 IIIII'<5.00 3 4#,+5.00

'. 12ce Furniture erchandise aoDances o-e o2ce interest charges &ayabe ;nterest e%&ense Freight ;n Re&airs on truck :abor  7rucks o-e 12ce

=0.00 50.00 50.00 <5.00 <0+.50 =#.00 '##.00 '<5.00 55+.50

"ultiple Choice Problem 4. d ranch A Assets/ ;nventory, anuary 4 ;-&rest branch und Accounts receivabe, anuary 4  7ota Assets :ess/ :iabiities o-e 12ce Current Account

3 4,000 ,000 55,000 3 <6,000 "0" 3 <6,000

ranch  3 4=,000 4,500 '#,500 3 +',000 "0" 3 +',000

.  b ranch A Assets/

ranch 

;nventory, 9ece-ber #4 ;-&rest branch und Accounts receivabe, 9ece-ber #4  7ota Assets :ess/ :iabiities o-e 12ce Current Account

3 4=,000 ,000 <0,000 3 =4,000 "0" 3 =4,000

3 4,000 4,500 5#,500 3 +<,000 "0" 3 +<,000

 #. d – incidentay, the entry in the books o the branch Doud be as ooDs/ Proft and loss summary ………………………………………………………… xxx  Home Oce Current……………………………………………………. Xxx  '. c  anuary 4,0%' Assets/ ;nventory 3etty cash und Accounts receivabe  7ota Assets :ess/ :iabiities o-e 12ce Current Account

anuary 4, 0%5

3 #<,000 #,000 '#,000 3 6#,000 IIIII"0" 3 6#,000

 5. a – reer to 8o. ' or co-&utations  +. a !aes :ess/ Cost o goods sod/ !F1…………………………………………………………… :ess/ ;nventory, ending……………………………………… *ross &ro@t…………………………………………………………… :ess/ $%&enses – 8et :oss………………………………………………………………..

3 '4,000 #,000 '=,000 3 =#,000 IIIII"0" 3 =#,000

3 <',000 3+<,+60 =,460

56,500 3 45,500 +,60 3 6,+60

 <. a  anuary 4, 0%+ Assets/ Cash   ;nventory Accounts receivabe  7ota Assets :ess/ :iabiities o-e 12ce Current Account

3 ',00 =,460 4,600 3 +,460 IIIII"0" 3 +,460

6. a – no-ina accounts have Lero beginning baance. =. d

JnadHusted baance, +#00%' Add (9educt)/ AdHust-ents 4 $rroneous recording o branch eui&-ent . ;nsurance &re-iu- recorded tDice #. $rroneous recording o reight '. 9iscount on -erchandise 5. Faiure by the branch to record share in advertising +. error by the ho-e o2ce to record re-ittance o

Branch Current 

H. Oce Current 

3 5,<<0

3 +,'65M

( ( ( #,000

#450 +<5) =0) 600) <00 IIIIIIII 

Cebu AdHusted baance, +#00%' 3 6,<<0 3 6,<<0 M 7he 3+,'65 is co-&ute si-&y by Dorking back Dith 36,<<0 adHusted baance as the starting &oint.

40. c

JnadHusted baance Add (deduct) adHust-ents/ ;n transit Re-ittance   Returns Cash in transit $%&enses " 1 $%&enses – branch   $rror AdHusted baance

o-e 12ce ooks (ranch Current" 9r. baance) 3546,5<5

P2-07  ranch ooks (o-e 12ce Current – Cr. baance) 3'5,<+ 40,500

( 4<,000) ( <<5) 5,000 (

600)

 IIIIIIII  3 500,000

4,000  IIIII' 3 500,000

44. d

JnadHusted baance Add (deduct) adHust-ents/ $%cess reight Cash in transit Returns $%&enses – branch AdHusted baance

o-e 12ce ooks (ranch Current" 9r. baance) 3545,000

ranch ooks (o-e 12ce Current – Cr. baance) 3'=5,<50 (

<50)

( 44,000) ( ',000)  IIIIIIII

5,000

3 500,000

3 500,000

4. c – reer to 8o. 44 or co-&utations 4#. a – reer to 8o. 44 or co-&utations 4'. d – reer to 8o. 44 or co-&utations 45. d " 8o entry shoud be -ade in the books o the ho-e o2ce, since the reight shoud be chargeabe to the branch  and the &ay-ent o the reight Das -ade b# the branch$ 4+. a o-e 12ce ooks ranch ooks (ranch Current" (o-e 12ce Current – 9r. baance) Cr. baance) JnadHusted baance 365,000 3##,500 Add (deduct) adHust-ents/ Coection o branch receiv ( =,000) !hi&-ents in transit ',000 3urchase by branch o o2ce eui&-ent ( 4',500) Re-ittance ( ,000) IIIIIIIII   AdHusted baance 3 '6,500 3 '6,500 4<. b o-e 12ce ooks (ranch Current" 9r. baance)

ranch ooks (o-e 12ce Current – Cr. baance)

JnadHusted baance Add (deduct) adHust-ents/   Re-ittance   Returns $rror by the branch $%&enses – branch AdHusted baance

35=0,000

350+,<00

('0,000) (45,000)  IIIIIIII

#00 6,000

3 5#5,000

3 5#5,000

o-e 12ce ooks (ranch Current"  9r. baance) 3450,000

ranch ooks (o-e 12ce Current – Cr. baance) 344<,'0

46. c

JnadHusted baance Add (deduct) adHust-ents/ ;n transit 1 AR coected by br. !u&&ies returned $rror in recording r. 8; Cash sent to branch to *enera $%&ense by 1 AdHusted baance

#<,500 40,500 ( ',500) ( 4,060) 5,000 3 4<=,=0

5,000 3 4<=,=0

o-e 12ce ooks (ranch Current" 9r. baance) 3'0,000

ranch ooks (o-e 12ce Current – Cr. baance) 3#4,400

4=. d – reer to 8o. 46 or co-&utation. 0. a

JnadHusted baance Add (deduct) adHust-ents/ ;n transit 1 AR coected by br. Cash in transit $rror in recording r. 8; AdHusted baance

5,600 500 ,000 ( #,+00) 3#6,=00

,000 IIIIIII   3#6,=00

4. a – reer to 8o. 0 or co-&utations . a

JnadHusted baance Add (deduct) adHust-ents/   Coection o branch AR ;n transit 3urchase o urniture Return o e%cess -erchandise Re-ittance AdHusted baance #. b – reer to 8o.  or co-&utations '. (C)

o-e 12ce ooks (ranch Current" 9r. baance) 3'=,+00

ranch ooks (o-e 12ce Current – Cr. baance) 3'',00 (

( 4,00) ( 4,500) ( 500) 3'+,'00

600) #,00

IIIIIII 3'+,'00

 

!aes (3#50,000 N 3400,000)………………………………………………………….3 '50,000 :ess/ Cost o goods sod/ 3urchases (3'00,000 N 350,000)……………………………. 3 '50,000 :ess/ ;nventory, ending……………………………………… =0,000 #+0,000 *ross &ro@t…………………………………………………………… 3 =0,000 :ess/ $%&enses – !aaries and co--ission…………………………………….. 3 <0,000 Rent……………………………………………………………… 0,000 Advertising su&&ies (340,000 – 3+,000)…………………… ',000 1ther e%&enses………………………………………………. 5,000 ==,000 8et :oss……………………………………………………………….. 3( =,000) 5. a In adopting the imprest system or the agency or!ing und" the home oce rites a chec! to the agency or the amount o the und. #sta$lishment o the und is recorded on the home oce $oo!s $y a de$it to the %gency or!ing und and credit cash. &he agency ill re'uest  und replenishment hene(er the und runs lo and at the end o each fscal period. )uch a re'uest is normally accomplished $y an itemi*ed and authenticated statement o  dis$ursements and the paid (ouchers. +pon sending the agency a chec! in replenishment o  the und" the home oce de$its expense or other accounts or hich dis$ursements rom the und ere reported and credits cash.

+. d 8or-ay, transactions o the agency are recorded in the books o the ho-e o2ce se&aratey identi@ed Dith the a&&ro&riate agency.

%ui&' II 4. 3<6,000 ranch A Assets/ ;nventory, anuary 4 ;-&rest branch und Accounts receivabe, anuary 4  7ota Assets :ess/ :iabiities o-e 12ce Current Account

3 4,000 ,000 55,000 3 <6,000 IIIII"0" 3 <6,000

ranch  3 4=,000 4,500 '#,500 3 +',000 IIIII"0" 3 +',000

. 3+',000 – reer to 8o. 4   #. 340,'4+ !aes ……….………………………………………………………… :ess/ Cost o goods sod/ 3urchases……………………………..………………………. !hi&-ents ro- ho-e o2ce……………………………… :ess/ ;nventory, ending (3#,#=4 N 3<,+5)…….………… *ross &ro@t…………………………………………………………… Add (deduct)/ $%&enses……………………………………………………….. ;nterest e%&ense………………………………………………. *ain on sae…………………………………………………... 8et ;nco-e………………………………………………………………..  '. 3#4,'4+ O 34,000 N 340,'4+

3 60,000 3 5,000 5+,4+ 44,04+ <0,00 3 =,600 ( <,500) ( +6') 6,600 3 40,'4+

 5. Pero, since it is a no-ina account  +. 344<,'0

JnadHusted baance Add (deduct) adHust-ents/ ;n transit 1 AR coected by br. !u&&ies returned $rror in recording r. 8; Cash sent to branch to *enera $%&ense by 1 AdHusted baance

o-e 12ce ooks (ranch Current"  9r. baance) 3450,000

ranch ooks (o-e 12ce Current – Cr. baance) 344<,'0 #<,500

40,500 ( ',500) ( 4,060) 5,000 3 4<=,=0

5,000 3 4<=,=0

 <. 34<=,=0 " reer to 8o. + or co-&utation.  6. c  =. a 40. 3<,400 !aes

34<,+00

:ess/ Cost o goods sod *ross &ro@t :ess/ $%&enses !aaries and co--ission Q34,<50 N (5E % (34<,+00 – 340,000) Rent e%&ense Advertising e%&ense !a-&es e%&ense Q(35,000 – 3,000) % 4+ Advertising -aterias e%&ense (#5 % 34,50) 9e&reciati0n e%&ense Q(3,'00  5 years) % 44 isceaneous e%&ense 8et inco-e

40,500 3 <,400 3 ,4#0 600 #5 500 <50 '0 III+00

II5,4'5 3 4,=55

44. 35,4'5 – reer to 8o. 40 4. 34,=55 – reer to 8o. 40

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